Why are more Spanish laboratories considering Central America as part of their international expansion strategy?
For years, Spanish laboratories focused their internationalization efforts on European markets or large Latin American markets such as Mexico, Brazil, or Colombia. However, Central America has gained relevance within regional expansion strategies due to a combination of regulatory, commercial, and logistical factors that were not available to the same extent a decade ago.
The region is no longer viewed solely as a collection of individual markets, but as an area that can be planned for in an integrated manner. For a Spanish laboratory, the relevant question is no longer whether the region offers sufficient demand, but under which commercial and regulatory conditions it makes sense to enter.
A moderately sized market, but with growing demand and rising exports
The six countries under the EU-Central America Association Agreement (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama) have a combined population of approximately 52–55 million, and public health systems account for most medication purchases in the region.
Costa Rica has one of the most consolidated public health systems in Central America, while Panama also has significant institutional purchasing capacity. In both markets, the public sector plays an important role in access to and procurement of medicines.
Population aging and the increase in chronic diseases (diabetes, cancer, cardiovascular conditions) are also changing pharmaceutical demand and expanding access to innovative treatments. In addition, Central American pharmaceutical exports grew by 35.3% over the last five years, exceeding USD 1.095 billion in 2024, reflecting an expanding sector with the capacity to attract investment.
For a Spanish laboratory, this scenario makes it possible to diversify markets without relying exclusively on the region’s largest countries and to benefit from an environment of steady growth driven by expanding healthcare coverage and increasing needs for essential medicines.
The EU-Central America Association Agreement reduces trade barriers
The Association Agreement between the European Union and Central America eliminates or reduces tariffs for numerous categories of industrial products and facilitates European companies’ access to public procurement markets. These benefits do not replace compliance with national regulatory requirements. The applicable tariff treatment must be assessed based on the product’s tariff classification, its preferential origin, and the Central American country of import.
Test data protection for pharmaceutical products may also be relevant when evaluating a market-entry strategy in Central America. In several countries in the region, the applicable framework provides periods of exclusivity for undisclosed data submitted to obtain marketing authorization for certain pharmaceutical products, particularly those containing new chemical entities. Under CAFTA-DR, this protection lasts at least five years, although its scope, eligibility criteria, and implementation depend on each country’s legislation. Therefore, the available protection must be evaluated individually for each product and market before defining the regulatory and commercial strategy.
These benefits do not replace compliance with national regulatory requirements, but they may affect the economic viability of a market-entry strategy. It is advisable to review the agreement’s exact scope for the specific product category, as its application varies among the six member states.
Regulatory harmonization reduces complexity but does not eliminate it
The Central American Technical Regulation (RTCA) harmonizes certain technical requirements among several countries in the region, reducing duplication in dossier preparation. This does not mean that there is a single marketing authorization for all of Central America: each health authority maintains its own administrative procedures, evaluation timelines, and implementation criteria.
Costa Rica, El Salvador, Guatemala, and Honduras have a joint evaluation mechanism that allows approvals in less than three months for qualifying chemical drugs. Its scope and eligible products may vary, so its applicability should be analyzed before defining a specific regulatory pathway.
Regulatory harmonization can simplify a regional strategy, but each market still requires specific planning.
Panama and Costa Rica serve as regional entry points
Strategies frequently begin in countries that offer greater institutional stability, consolidated logistics infrastructure, or regulatory processes compatible with portfolio objectives.
Panama stands out for its dollarized economy and global logistics connectivity (the Canal and hub airport), as well as for being a net importer of medicines with robust public procurement.
Costa Rica has a consolidated healthcare system through the Costa Rican Social Security Fund (CCSS) and a developed life sciences and medical device cluster, with more than 90 multinational companies established there and 52% of new medical device investments in Latin America.
The choice between the two (or the combined use of both as distribution hubs for the rest of the region) will depend on the type of product, the commercial channel, and each company’s growth strategy.
Differentiation does not depend solely on price
The Central American market already has an established presence of multinational companies such as Sanofi, Pfizer, and GSK, as well as regional competitors such as Eurofarma and Tecnofarma, with a strong focus on generics. In this context, competing exclusively on price is rarely sustainable for a European laboratory entering the market for the first time.
Differentiation can be built around solid quality standards and GMP compliance, clinical evidence, scientific support, pharmacovigilance, supply reliability, and commercial strategies such as branded generics, co-marketing, or licensing agreements with local partners. Opportunities may also exist in specialized segments, including rare diseases, advanced therapies, and specialty medicines, although the level of competition and commercial potential must be evaluated by country and therapeutic category.
Regional expansion makes it possible to manage risk gradually
Regulatory timelines, distributor availability, and operational capacity vary significantly among countries. Guatemala and Nicaragua, for example, tend to have more bureaucracy and delays than the regional average.
A common strategy is to begin operations in one or two more stable markets (typically Panama and Costa Rica), evaluate regulatory and commercial performance, and subsequently scale into the rest of the region, including the Northern Triangle, as local experience increases. Entering through multicountry distributors or regional hubs, rather than establishing proprietary infrastructure from the outset, also reduces initial exposure.
What a laboratory should evaluate before prioritizing Central America
Before defining a market-entry strategy, it is advisable to analyze:
- The specific regulatory requirements of each country, beyond what the RTCA covers.
- The actual applicability of the joint evaluation mechanism to the product in question.
- The scope of intellectual property and test data protection under CAFTA-DR.
- The structure of the public procurement system and the private market in each target country.
- The capacity and terms of distributors or local partners in Panama and Costa Rica.
- The most appropriate sequence for registering the portfolio in different markets.
Answering these questions from the outset contributes to more realistic planning and better use of available resources.
Conclusion
Central America is increasingly moving away from being viewed solely as a collection of individual markets and toward being seen as a region that can be planned for in an integrated manner. This perspective does not eliminate regulatory differences among countries, but it does create the possibility of building more efficient strategies than a decade ago.
For Spanish laboratories, identifying where demand exists is only the starting point. The outcome of regional expansion depends on how regulation, logistics, trade agreements, and the sequence of marketing authorization applications interact, and that combination often carries more weight than the size of any individual market.